So you have ventured online and bought books and CDs. You may even have taken the plunge and applied for a credit card or loan. Now it is time to get ready to become a big ticket internet purchaser and pick up a new mortgage.
Clicks and bricks
Homebuyers took out more than half a million mortgages online last year. That's 5% of all new home loans. Financial research experts Forrester estimate that those figures will triple by 2008 to account for £1.6 million of new lending.
Russell Gould, head of e-commerce for Bradford & Bingley agrees: 'The online evolution of the D.I.Y mortgage market continues to go from strength to strength. This is reflected in the record growth of our online mortgage applications and shows increasing consumer confidence in using the Internet for financial services. The Net is a fantastic way to research the mortgage market, even if you then just take the information you acquire to a High Street lender or other adviser,' he adds.
Industry body the Council of Mortgage Lenders (CML) is constantly carrying out surveys to see how the market is developing. It is confident that the Internet has a role to play but believes it will take time for greater confidence to develop so that borrowers actually buy their mortgage on the net as well as shopping around for the best deal. 'Our view is that the Internet has a very large part to play in shopping around, investigating and comparing mortgages but that most people want a face-to-face transaction, either directly with a lender, or a broker, when it comes to transacting a mortgage.' explains Bernard Clarke of the CML. To confirm this, hot off the presses, is the CML's latest research from MORI. It reveals that 84% of customers still rely on a face-to-face situation to make the commitment to buy.
Buy your house with a mouse
The future looks bright for surfers though. 'People are becoming more savvy and more prepared to buy online,' says Ray Boulger, senior technical manager at Charcol. 'Sites are also becoming more user- friendly,' he explains. Broker sites, like that found on Yahoo! (in partnership with The MarketPlace at Bradford & Bingley), or aggregation sites, like Moneyextra, tend to be more useful to borrowers. For starters, you will get an independent view. They allow you to compare a range of mortgages whereas bank and building society sites are restricted to their own products. Plus the independent sites usually offer easy-to-use online help and calculators enabling you to work out how much you can borrow and what your repayments will be.
So how easy is it really? In most cases, you can make good progress in just 15 minutes, from the comfort of your own home and with no pushy salesman. Aggregation or broker sites, like Yahoo!'s, usually provide customers with a completely free service that offers the ability to search for a mortgage to meet their specific requirements. Consumers can find all the mortgages that they might be eligible for and then use advanced filters to include mortgages with specific features, i.e. penalty free etc. Homebuyers can then dig down into the detail of the short-listed options and continue to compare them to each other, so that they only need to focus on the deals which are likely to be of real interest and suit their needs. Once the right mortgage is selected consumers can apply online and a representative will manage all aspects of the application through to completion, including liaising with all the relevant parties to make the process as stress free as possible.
Net savings
It is not just first- time buyers who can benefit from buying a mortgage online either. More than half of the UK's 17 million mortgage holders have no clue about what is on offer online according to research from lender GMAC-RFC. Little wonder then that one in 10 borrowers are missing out on £1,366.32 a year by not remortgaging. This makes for a staggering £2.4 billion wasted each year by people not shopping around.
But even then, homeowners are three times more likely to shop around for car insurance than think about how to switch to a better deal on their biggest financial commitment, according to the Department of Trade and Industry. Sounds like it is time to click some life into your mortgage.
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